By Keith Hosmer, Vice President, Cotiviti Retail
CFOs are told to protect margin without adding headcount. That's the expectation.
The reality is messier. Supplier relationships have gotten more complex, costs keep climbing, and spending governance is under more scrutiny than it's been in years. Contract compliance sits right in the middle of that tension, and in his latest article, John Lang, Senior Vice President of Retail at Cotiviti, argues it's one of the few levers that can deliver near-term recoveries while reducing leakage that quietly builds over time.
Most organizations don't have control. They have a habit. John offers a simple test. “Can you say, with confidence, which contracts are covered, how often they're reviewed, and how much leakage you've prevented versus recovered?” If not, what you're running isn't a program, it's an audit that happens to repeat.
Let’s dive deeper into why and how to resolve this all-too-common challenge.
The pattern is familiar
A company audits its highest-value suppliers, finds real money, and calls it a win. But contracts evolve, vendors are onboarded, and agreements get amended, renewed, and forgotten. Without a standing cadence, the same gaps that were just bridged start reopening somewhere else, usually before anyone notices. John’s proposed shift? Stop asking whether a contract was audited, and start asking what the review cadence is, as well as where attention should go next.
Cycling, not scanning
One of the more counterintuitive points in John's framing is that repetition done deliberately is the feature, not the flaw. Instead of returning to the same suppliers or waiting for something to break, a structured rotation prioritizes contracts by risk, expense, and complexity, and spreads coverage across categories over time.
This does two things at once. It continues to surface new recovery opportunities as business conditions shift, and it quietly but consistently signals to suppliers that someone is watching. John notes that signal alone tends to change behavior before an audit ever begins.
The money isn't just in the recovery
It's tempting to measure a compliance program by its first win.
Recoveries from overbilling and missed credits are real, and they often make a program self-funding from day one, but the larger financial case is what happens after. Corrected billing practices compound into run-rate savings, then better renewal terms follow from audit-backed insight. Forecasting gets more reliable once spending stops surprising finance every quarter, and for companies that stick with it, the savings generated over time end up outweighing the initial recovery. Compliance stops being a one-time gain and starts acting like a multiplier.
Why "mature" programs stall anyway
Programs lean too hard on early wins, then lose direction once the obvious problems are solved.
Prioritization erodes as contract volume grows, findings are resolved but never make it back into contract language or sourcing standards, and too much of the decision-making rests on institutional memory instead of data. The fix isn't more audits. It's sequencing, decision support, and a feedback loop that keeps sharpening where attention goes next.
Closing this gap is why Cotiviti built an AI-enabled Contract Intelligence tool which analyzes contract language for risk and inconsistency, flags terms historically tied to compliance issues and also compares structures across vendors so that teams know where to look first. Not to replace expert judgment, but to direct it.
From recovery to resilience
A well-run contract compliance program strengthens governance, improves supplier relationships, and raises the quality of every agreement signed afterward.
John's closing point is worth remembering. “In an environment where every dollar is scrutinized, contract compliance isn't a nice-to-have anymore. It's a strategic advantage, and the organizations treating it that way are the ones building resilience, not just chasing recoveries.”
To learn how Cotiviti helps retail and commercial companies move beyond recovery to more proactive control, reach out to your Cotiviti representative or share your questions at answers@cotiviti.com.
About the author
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Keith Hosmer is a contract compliance leader with more than 15 years of experience helping large organizations protect profit and enhance vendor compliance. He brings deep expertise auditing complex spend categories across facilities management, oil and gas, capital projects, and more. Keith focuses on delivering measurable recoveries, strengthening controls, and creating long-term value for clients. He is known for translating complex contractual and operational details into clear, actionable insights that support confident executive decision-making. |
